Published: Tuesday, December 4, 2012 at 7:08 p.m.

Last Modified: Tuesday, December 4, 2012 at 7:08 p.m.

Amanda Ellis and Early Peters have had no luck in their quest to buy a home.

Staff Photo by Thomas Bender

Their wish list included three bedrooms and an open floor plan, in an area east of Lakewood Ranch where lots tend to be larger.

The couple felt their timing was good because of the downturn in residential real estate. Casting aside their $150,000 budget for something more grand, they scouted listings for months and toured as many as five homes per week until they finally found the one.

They placed a bid that was $20,000 higher than the $205,000 asking price on a 2,000-square-foot home in the Foxbrook subdivision that had been the subject of a short sale.

Nine other buyers outbid them.

“We had a contract written when we walked in the door,” Peters said. “It just wasn't enough.”

After a 2012 that has harkened back to the boom years in Southwest Florida, the real estate market has been nearly picked clean. Inventories are so low that some experts worry that hungry buyers will begin looking elsewhere, or that buyers like Peters and Ellis will simply give up their searches.

Throughout Southwest Florida, the inventory of available homes stands at about four months — the time it would take to sell all available listings if no new homes came on the market. Typically, experts point to markets with a six-month inventory as being in “equilibrium.” Less inventory favors sellers, more inventory, buyers.

“One of the things we're starting to see is multiple offers on almost every property,” said Ed Martinez, a Realtor with Keller Williams on the Water in downtown Sarasota. “That tells me we need more inventory. It's just slim pickings.”

The ironic savior, some contend, to the lack of available homes? More foreclosures.

Market watchers blame the circumstances driving buyer dismay to a lack of viable housing supply that has plagued the real estate industry since early spring.

The trend, if not offset by new homes coming to market or new construction, could hamper home sales now steering the economic recovery — stymieing the busy buying season from New Year's Day to Easter — and sending investors to other real estate hot spots, like Fort Myers or Palm Beach, where there is still plenty to choose from.

“One of the big problems is the banks are holding off on these (foreclosures) and sitting on them,” said Jack McCabe, a housing analyst in Deerfield Beach.

“That has had a dramatic impact on supply, and it also has artificially pushed prices up.”

The market is especially hungry in the $150,000 to $350,000 price range, where the vast majority of middle-class homes change hands in Southwest Florida. Of the 9,026 total housing listings now on the market in the region's three counties, 713 are priced above $1 million. But the inventory supply becomes even thinner when less-desirable, low-end properties — which often linger on the market unsold for months — are removed.

Although inventory rose a modest 1.5 percent in October, the 3,517 existing homes for sale in Sarasota County is down more than 20 percent from the same time last year. Only 14.8 percent of those are distressed, records show.

“In the desirable price range, there's just nothing on the market,” said Echo Belser, a Realtor with Marcus & Co. Realty in Bradenton. “It either needs too much work or has to be a cash purchase.”

The evaporation of supply was driven by a resurgence in buyer demand that climbed this year to its best since the boom, with 5,379 Sarasota County properties sold year-to-date at a median price of $174,000.

Along with a slowdown in new foreclosures and the increased willingness by banks to modify troubled loans, the rate of sales has accelerated to the point many buyers are shut out — with no easy solution in sight.

That was what happened to Ellis and Peters.

After their Foxbrook experience, the young Manatee County couple — who had finished school, begun careers and started thinking about a family of their own — next focused on a 2,476-square-foot, bank-owned home on five acres. Their $220,669 offer never even came close.

On their third try they went after an arm's length transaction with no defaults — but after much negotiation, the seller refused to budge on his $255,000 asking price, which was too high for Ellis and Peters.

In October, an offer finally stuck at $219,000. Just days from moving in, the couple had gone furniture shopping, bought new appliances and told family and friends.

But plans for a housewarming party were premature. Their appraisal came back $34,000 below the negotiated purchase price — kicking the property into short sale territory and leaving the frustrated newlyweds stranded. They expect to be waiting for several more months.

“There were nights I would cry,” Ellis said. “There are so many emotions going through your head. One minute you're happy, the next you're devastated. It's a roller coaster.”

Typically, a new wave of homes would offset a lack of inventory. Federal census data shows the average homeowner stays in a property for about seven years. That would mean the next wave of sellers would occur from homes purchased in 2005. But back then, prices were inflated to their highest peak in decades.

Those owners, meanwhile, many of whom are now thousands of dollars underwater, cannot afford to list their home even if they wanted to. Some do not qualify for a short sale, and a foreclosure could take up to a year to enter the market, said Dan Freed, a Realtor with Michael Saunders & Co.'s Palmer Ranch office.

The tight supply has agents like Freed on edge, fearing there will not be enough viable homes to sell when the market begins its traditional rise in early January.

Many Realtors now believe cumulative sales totals will take a steady dip next year because of it.

The “fiscal cliff,” uncertainty still surrounding the recent presidential election and the impact of the European financial crisis on foreign buyers also could temper sales, Freed said.

“Some people who want to buy but can't find the home they want will just hold off and wait,” he said. “Investors see this. I have already lost a lot of sales to markets I never dreamed of losing to in the past.”

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